Bidding strategy based on the degree of completion for bilateral negotiation of power market

Rubinstein model is widely used in bilateral negotiation problems, and in this paper it is used in the bilateral negotiations between large consumer and generating company in power market. In real market, there are several negotiation agents for one large consumer or one generating company, and thus different from traditional STS (Single-To-Single) model, MTM (Multi-To-Multi) model is used in this paper to describe the bilateral negotiations between large consumer and generating company. In Rubinstein model, the concession negotiation strategy is expressed by the discount factor, but in the bilateral negotiations between large consumer and generating company the motivation of concession is quite different from general problems. Then, based on above MTM model, the discount factor is defined according to the degree of completion and the negotiation round. Detailed strategy design is given in the paper and the results of numerical simulation also demonstrate the validity of proposed strategy.